REG - Alternative Inc REIT - NAV, Dividend Declaration and Portfolio Valuation

Alternative Income REITAnnouncement

Wed 09:30

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RNS Number : 2967G  Alternative Income REIT PLC  05 November 2025

5 November 2025

Alternative Income REIT PLC

(the "Company" or "Group" or "AIRE")

NET ASSET VALUE, DIVIDEND DECLARATION AND PORTFOLIO VALUATION UPDATE

TO 30 SEPTEMBER 2025

Declares an interim dividend of 1.40 pence per share ("pps") for the quarter
ended 30 September 2025

The target annual dividend of no less than 5.6pps for the year ending 30 June
2026(†)

Dividend cover of 136.4% for the quarter

Unaudited NAV total return for the quarter of 2.2%

Resilient portfolio well-placed to continue to provide secure, index-linked
income with the potential for capital growth

 

The Board of Directors of Alternative Income REIT PLC (ticker: AIRE), the
owner of a diversified portfolio of UK commercial property assets,
predominantly let on long leases with index-linked rent reviews, provides a
trading and business update and declares an interim dividend for the quarter
ended 30 September 2025.

 

Simon Bennett, Non-Executive Chair of Alternative Income REIT plc, comments:

 

The Board is pleased to declare its first interim dividend of 1.4pps for the
quarter ended 30 September 2025, in line with the Company's dividend target of
5.6pps for the year ending 30 June 2026. The resetting of the dividend target,
is entirely due to the increase in financing costs on the Group's new HSBC
bank facilities, which were drawn down recently. The dividend cover for the
quarter stood at a robust 136.4%, and the dividend target remains subject to
the continued timely collection of rent across the portfolio.

 

As at 30 September 2025, the Group's unaudited Net Asset Value (NAV) was
£67.6 million, or 84.0pps, marking a 0.4% increase from the previous quarter.
Including the 1.55pps dividend paid during the period, this equates to an
unaudited NAV total return of 2.2% for the quarter.

The Group's portfolio valuation increased by £0.2 million to £107.6 million,
or 0.2%, during the quarter and continues to demonstrate resilience, being
100% let, with 100% rent collection and 92.4% of leases subject to
index-linked rent reviews.

The Board are pleased to have completed the new long term financing
arrangements with HSBC on 20 October 2025, which provides the Group with
certainty of financing for at least the next five years."

 

Overview of Key Financials

                                            At 30 September 2025  At 30 June 2025  Change

                                            (unaudited)           (audited)
 Net Asset Value ("NAV")                    £67.6 million         £67.3 million    +0.4%
 NAV per share                              84.0p                 83.6p            +0.4%
 Share price per share                      71.0p                 74.0p            -4.1%
 Share price discount to NAV                15.4%                 11.5%            +3.9%
 Investment property fair value             £107.6 million        £107.4 million   +0.2%

 (based on external valuation)
 Loan to gross asset value ("GAV") (A) (B)  36.8%                 36.9%

 

                                   Quarter ended         Quarter ended              Change

                                   30 September 2025     30 June 2025 (unaudited)

                                   (unaudited)
 EPRA earnings per share (A)       1.8p                  1.6p                       +10.6%
 Adjusted earnings per share (A)   1.9p                  1.6p                       +19.4%
 Dividend cover (A)                136.4%                101.3%                     +35.1%
 Total dividends per share         1.40p                 1.55p                      -9.7%
 Dividend yield (annualised)(A)    8.7%                  8.4%                       +0.3%
 Earnings per share                1.9p                  2.1p                       -9.5%
 Share price total return (A)      -2.0%                 10.3%
 NAV total return (A)              2.2%                  2.5%                       -0.3%
 Annualised passing rent           £8.1 million          £8.1 million               -
 Ongoing charges (A) (annualised)  1.5%                  1.6%                       -0.1%

(A) Considered to be an Alternative Performance Measure.

(B) The loan facility at 30 September 2025 of £41.0 million (30 June 2025:
£41.0 million) with Canada Life Investments matured on 20 October 2025, had a
weighted average interest cost of 3.19%. This has been refinanced with the new
HSBC loan facilities from 20 October 2025.

 

Dividend Declaration, Earnings Per Share and Dividend Cover

 

The Board is pleased to declare its first interim dividend of 1.4pps for the
quarter ended 30 September 2025, in line with the Company's dividend target of
5.6pps for the year ending 30 June 2026. The resetting of the dividend target,
which is lower than the previous year's, is entirely due to the increase in
financing costs on the new HSBC bank facilities. This interim dividend will be
distributed as Property Income Distribution ("PID") and will be paid on 28
November 2025 to shareholders on the register on 14 November 2025. The
ex-dividend date will be 13 November 2025.

 

The Adjusted EPS was 1.9pps for the quarter (30 June 2025: 1.6pps) and the
dividend cover increased to 136.4% this quarter (30 June 2025: 101.3%), as a
result of both increased adjusted EPS and the reduced interim dividend.

 

Property Portfolio

 

At 30 September 2025, the Group held 20 properties (30 June 2025: 20
properties) valued at £107.6 million (30 June 2025: £107.4 million). The
total increase for the quarter ended 30 September 2025 amounted to 0.2%. The
Group's portfolio is riding the storm of recent market fluctuations well,
benefiting from being 100% let, with 100% collection of rent due and its 92.4%
index-linked rent review profile.

 

At 30 September 2025, the Net Initial Yield on the Group's portfolio was 7.1%
(30 June 2025: 7.1%). The weighted average unexpired lease term at 30
September 2025 was 15.3 years to the earlier of break and expiry (30 June
2025: 15.6 years) and 17.0 years to expiry (30 June 2025: 17.2 years).

 

The Group's contracted annualised rent increased by 0.7% during the quarter
(30 June 2025: 0.4%). This was due to annual rent review of the Group's
property in Salford and the three yearly indexation of the lease of our garage
in Crawley, which has recently been sold. 92.4% of leases within the portfolio
are index-linked, with 36.5% of the contracted rental income reviewed
annually. Active management of the portfolio continues with conversations
progressing with a number of tenants considering re-gearing leases, removing
tenant breaks and extending lease lengths. For the upcoming quarter to 31
December 2025, 9.6% of the Group's income will be reviewed, through two annual
index-linked rent reviews.

 

As announced on 27 October 2025, the Group completed the sale of the
Applegreen Petrol Filling Station, Crawley Avenue, Crawley, for a total
consideration of £4.5 million, at a premium to book value at 30 June 2025 of
£0.5 million.

 

Net Asset Value, Share Price and Share Price Discount to NAV

 

At 30 September 2025, the Group's unaudited NAV was £67.6 million, 84.0pps
(30 June 2025: £67.3 million, 83.6pps), representing a 0.4% increase over the
previous quarter.

 

When combined with the 1.55pps dividend paid in the quarter, this produces an
unaudited NAV total return for the quarter of 2.2% (30 June 2025: 2.5%). Over
the quarter, the Company's share price decreased by 2.0% to 70.0pps,
reflecting an increase in the discount from 11.5% to 15.4%.

 

The table below sets out the movement in NAV during the quarter.

 

                                           Pence per share  £ million
 NAV at 30 June 2025                       83.6             67.3
 Valuation movement in property portfolio  +0.1             +0.1
 Income earned for the period              +2.6             +2.1
 Expenses for the period                   -0.4             -0.3
 Net finance costs for the period          -0.4             -0.4
 Interim dividend paid during the quarter  -1.5             -1.2
 NAV at 30 September 2025                  84.0             67.6

 

The NAV attributable to the ordinary shares has been calculated under
International Financial Reporting Standards as adopted by the United Kingdom
and incorporates both the Group's property portfolio individually valued on a
'Red Book' basis at 30 September 2025 and net income for the quarter but does
not include a provision for the interim dividend declared today (see above).

 

The income earned for the period includes an accrual for the minimum
contractual uplifts contained in the index-linked leases. In the event that
inflation is greater than these minimum contractual uplifts, the actual income
will be greater than the income currently accrued.

 

Rent Collection

Rent collection remains resilient with 100% collection of rent due for the
quarter ended 30 September 2025. 90.6% of the portfolio's contracted rent is
payable quarterly in advance. The remainder is payable monthly in advance.

 

Refinancing

 

The Group refinanced its long-term loan facility on 20 October 2025 with HSBC
UK Bank Plc, using the proceeds to repay the previous Canada Life facility in
full. The new HSBC Bank Facilities consist of both a fixed term loan of £31
million and a £10 million revolving credit facility, both on floating rates
for a fixed term of five years with an option to extend by two years if
mutually acceptable.

 

The new HSBC Bank Facilities attract a margin of 1.7% per annum plus SONIA
(sterling overnight index average rate). This represents an improvement in
terms on the previous debt facilities, but total finance costs will increase
as a result of the higher prevailing base interest rates. The financial
covenants in the new HSBC Bank Facilities also represent improved terms to the
Group, being based on a Loan to Value covenant which is not to exceed 60% and
an Interest Cover Ratio to be greater than 160%.

 

† This is a target and not a formal dividend forecast or a profit forecast

 

ENQUIRIES

 Alternative Income REIT PLC
 Simon Bennett - Chair                                  Via AIRE's Company Secretary, Hanway Advisory: 0207 409 0181 or by email:

                                                        Aire.Cosec@jtcgroup.com

 Martley Capital Real Estate Investment Management Ltd  020 4551 1240

 Richard Croft

 Jane Blore

 Panmure Liberum Limited                                020 3100 2000
 Alex Collins
 Tom Scrivens

 

The Company's LEI is 213800MPBIJS12Q88F71.

 

Further information on Alternative Income REIT PLC is available at
www.alternativeincomereit.com (about%3Ablank) (1).

 

(1) Neither the content of the Company's website, nor the content on any
website accessible from hyperlinks on its website or any other website, is
incorporated into, or forms part of, this announcement nor, unless previously
published on a Regulatory Information Service, should any such content be
relied upon in reaching a decision as to whether or not to acquire, continue
to hold, or dispose of, securities in the Company.

 

NOTES

Alternative Income REIT PLC aims to generate a sustainable, secure and
attractive income return for shareholders from a diversified portfolio of UK
property investments, with a particular focus on alternative and specialist
real estate sectors. The majority of the assets in the Group's portfolio are
let on long leases which contain index linked rent review provisions.

 

The Company's asset manager is Martley Capital Real Estate Investment
Management Limited ("Martley Capital"). Martley Capital is a full-service real
estate investment management platform whose activities cover real estate
investing, lending, asset management and fund management. It has over 35
employees across five offices in the UK and Europe. The team manages assets
with a value of circa £850 million across 30 mandates (at 30 June 2025).

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